NOMINATION AND REMUNERATION POLICY

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Adopted in Board Meeting Dated 13/02/2019

AXITA COTTON LIMITED This Nomination and Remuneration Policy is being formulated in Compliance with Section

178 of the Companies Act, 2013 read along with the applicable rules thereto. The Board has

also constituted Nomination and Remuneration Committee (NRC) as on October 26, 2018.

This policy on nomination and remuneration updated by Directors, Key Managerial

Personnel and Senior Management has been formulated and approved by the Board of

Directors on February 13, 2019.

1. DEFINITIONS:

i) “Act” means the Companies Act, 2013 (and the rules framed thereunder).

ii) “Board” means Board of Directors of the Company.

iii) “Director” means a director on the Board of the Company.

iv) “Committee” means the Nomination and Remuneration Committee of the Company as

constituted or re-constituted by the Board.

v) “Company” or “The Company” Axita Cotton Limited.

vi) “Independent Director” means a Director referred to in Section 149(6) of the Act read

with regulation 16(1)(b) of the Listing Regulations.

vii) Key Managerial Personnel (KMP) means:

a) the Chief Executive Officer or the managing director or the manager, as

applicable;

b) the company secretary;

c) the whole-time director;

d) the Chief Financial Officer; and

e) such other officer as may be prescribed.

viii) “Senior Management” shall mean officers/personnel of the Company who are

members of its core management team excluding the Board and normally this shall

comprise all members of management one level below the executive directors, including

all functional heads.

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AXITA COTTON LIMITED ix) “Listing Regulations” means the Securities and Exchange Board of India (Listing

Obligations and Disclosure Requirements) Regulations, 2015.

Unless the context otherwise requires, words and expressions used in this policy and not

defined herein but defined in the Act and/or the Listing Regulations as may be amended

from time to time shall have the meaning respectively assigned to them in the Act and/or

the Listing Regulations.

x) “Remuneration” means any money or its equivalent given or passed to any person for

services rendered by him and includes prerequisites as defined under the Income Tax act,

1961.

2. OBJECTIVE:

The objectives of this Policy are set forth below:

(a) to lay down criteria and terms and conditions with regard to identifying persons who are

qualified to become Directors (independent, executive and non-executive) and persons

who may be appointed in Senior Management and Key Managerial Personnel positions;

(b) to ensure that the level and composition of remuneration is reasonable and sufficient

to attract, retain and motivate Directors of the quality required to run the Company

successfully;

(c) to ensure that relationship of remuneration to performance is clear and meets

appropriate performance benchmarks;

(d) To carry out evaluation of the performance of Directors, as well as Key Managerial and

Senior Management personnel and provide necessary report to the Board for further

evaluation by the Board; and

(e) to ensure that the remuneration paid to the Directors, Key Managerial Personnel and

Senior Management personnel involves a balance between fixed and incentive pay

reflecting short and long-term performance objectives appropriate to the working of the

Company and its goals.

3. ROLE OF THE COMMITTEE:

The role of the Committee shall, inter-alia, include the following:

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AXITA COTTON LIMITED I. formulation of the criteria for determining qualifications, positive attributes and

independence of a Director and recommend to the Board a policy relating to, the

remuneration of the Directors, Key Managerial Personnel and Senior Management

personnel;

II. formulation of criteria for evaluation of performance of Independent Directors and

the Directors;

III. devising a policy on diversity of the Board;

IV. identifying persons who are qualified to become Directors and who may be

appointed in senior management positions in accordance with the criteria laid

down, and recommend to the Board their appointment and removal;

V. whether to extend or continue the term of appointment of the Independent Director,

on the basis of the report of performance evaluation of Independent Directors; and

VI. Any other functions as may be assigned by the Board from time to time.

4. APPOINTMENT AND REMOVAL OF DIRECTOR, KEY MANAGERIAL PERSONNEL AND

SENIOR MANAGEMENT PERSONNEL:

a) The Committee shall identify and ascertain the integrity, qualification, expertise and

experience of the person for appointment as a Director and recommend the same to

the Board. Key Managerial Personnel other than Managing Director shall be appointed

as per the Act. Senior Management personnel shall be appointed as per the Company’s

policy formulated in this regard.

b) A person should possess adequate qualification, expertise and experience for the

position he / she is considered for appointment. The Committee shall have authority to

decide whether qualification, expertise and experience possessed by a person is

sufficient / satisfactory for the position.

c) The Company shall not appoint or continue the employment of any person as a

Whole-time Director who has attained the age of seventy years. Provided that the term

of the person holding this position may be extended beyond the age of seventy years

with the approval of shareholders by passing a special resolution.

5. TERM/TENURE:

Managing Director/Whole-time Director:

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AXITA COTTON LIMITED The Company shall not appoint or re-appoint any person as its Executive Chairman,

Managing Director or Executive Director for a term not exceeding five years at a time. No

re-appointment shall be made earlier than one year before the expiry of term.

Independent Director:

An Independent Director shall hold office for a term up to five consecutive years on the

Board and shall be eligible for re-appointment on passing of a special resolution by the

Company and disclosure of such appointment in the Board's report.

No Independent Director shall hold office for more than two consecutive terms of up to

maximum of 5 years each, but such Independent Director shall be eligible for appointment

after expiry of three years of ceasing to become an Independent Director.

Provided that an Independent Director shall not, during the said period of three years, be

appointed in or be associated with the Company in any other capacity, either directly or

indirectly.

At the time of appointment of Independent Director it should be ensured that number of

Boards on which such Independent Director serves is restricted to seven listed

companies as an Independent Director and three listed companies as an Independent

Director in case such person is serving as a Whole-time Director of a listed company or

such other number as may be prescribed under the Act.

6. EVALUATION:

The Committee shall carry out evaluation of performance of Director, KMP and Senior

Management personnel yearly or at such intervals as may be considered necessary.

7. REMOVAL:

The Committee may recommend with reasons to be recorded in writing, removal of a

Director, KMP or Senior Management personnel subject to the provisions and Compliance

of the Act and the policy of the Company.

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AXITA COTTON LIMITED 8. RETIREMENT:

The Director, KMP and Senior Management personnel shall retire as per the applicable

provisions of the Companies Act, 2013 and prevailing policy of the Company. The Board will

have the discretion to retain the Director. KMP and Senior Management personnel in the

same position/remuneration or otherwise even after attaining the retirement age, for the

benefit of the company.

Remuneration to Managing Director / Whole-time Directors:

a) The Remuneration/ Commission, as applicable, to be paid to Managing Director /

Whole-time Directors, etc. shall be governed as per provisions of Act or any other

enactment for the time being in force and the approvals obtained from the Members of

the Company.

b) Committee shall make such recommendations to the Board, as it may consider

appropriate with regard to remuneration to Managing Director / Whole-time Directors.

Remuneration to Non- Executive / Independent Directors:

a) The Non-Executive / Independent Directors may receive sitting fees and such other

remuneration as permissible under the provisions of the Act and the Listing

Regulations. The amount of sitting fees shall be such as may be recommended by the

Committee and approved by the Board.

b) All the remuneration of the Non- Executive / Independent Directors (excluding

remuneration for attending meetings as prescribed under Section 197 (5) of the Act

shall be subject to ceiling/ limits as provided under the Act or any other enactment for

the time being in force. The amount of such remuneration shall be such as may be

recommended by the Committee and approved by the Board or the shareholders of the

Company, as the case may be.

c) An Independent Director shall not be eligible to get stock options and also shall not be

eligible to participate in any share based payment schemes of the Company.

d) Any remuneration paid to Directors for services rendered which are of professional in

nature shall not be considered as part of the remuneration for the purposes of clause

(b) above if the following conditions are satisfied:

i) The Services rendered are of a professional nature; and

ii) In the opinion of the Committee, the director possesses the requisite qualification

for the practice of that profession

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AXITA COTTON LIMITED e) The Compensation Committee of the Company, constituted for the purpose of

administering the Employee Stock Option/ Purchase Schemes, shall determine the

stock options and other share based payments to be made to Directors (other than

Independent Directors).

9. IMPLEMENTATION:

i. The Committee may issue guidelines, procedures, formats, reporting

mechanism and manuals in supplement and for better implementation of this

policy as considered appropriate.

ii. The Committee may delegate any of its power to one or one member of its

member.

NOMINATION AND REMUNERATION POLICY - Axita Cotton

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